Sherwin rallied past an 87.40 buy point in a long cup with handle in late December of 2011 (1) (a monthly chart is shown). Volume was initially weak, but the stock gathered institutional support and stronger trading in the first two weeks of January.

Valspar, which had cleared a buy point in heavy trade in November 2011, was the group leader. But Sherwin also showed signs of strength, advancing for seven straight weeks up the cup's right side, closing consistently high in its range and driving its relative strength line to a new high. After clearing the base, it rose for 19 of the next 20 weeks through early May.

A 51% gain in first-quarter earnings and a 15% rise in sales put Sherwin on the leadership radar. A month after that April 19 report, the stock tested its 10-week moving average. Volume on the rebound was healthy, giving investors a chance to step on board.

In June, Sherwin formed a flat base with a 134.07 buy point. The stock's EPS Rating had climbed to a solid 87. Its Relative Strength Rating was a rocking 96, the Composite Rating a 97. The rally above the base's 134.07 buy point also came in light trade. A 4% gain in heavy trade on July 19 could have been considered a rebound from 10-week support.

Notice: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. The information has been obtained from sources we believe to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the stocks they discuss. The information and content are subject to change without notice.